China: Construction steel prices seen range-bound in Mar'26

• High inventories to pressure longs prices during early Mar'26
  
  
• Construction demand to pick up by mid-Mar as weather improves
  
  

Mysteel Global: Construction steel prices in China may fluctuate slightly this month, primarily influenced by the shift in market fundamentals and policies announced during this week's 'Two Sessions' political meetings in Beijing, according to Mysteel's latest monthly report on the sector.

During the first half of this month, high post-Chinese New Year (CNY) inventory levels are anticipated to put pressure on long steel prices on the one hand, while on the other, the mounting stocks of long steel items are seen being reversed in the second half by recovering end-user demand, the report observes.

Prices of steel longs declined mildly last month, mainly due to dull demand and the quiet market during the CNY break. On 28 February, Mysteel assessed China's national price of HRB400E 20mm dia rebar at RMB 3,304/tonne (t) ($479/t), including the 13% VAT, down by RMB 12/t from the level on 30 January.

The daily spot trading volume of construction steel products comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's tracking averaged 34,882 t/day last month, slumping by 58.3% or 48,838 t/d from January's average level.

For this month, domestic demand for long steel products is forecast to recover from February's year-low level, as work on most construction sites had resumed around the time of the Chinese Lantern Festival on 3 March, according to market sources. Spot transactions are projected to gradually return to normal by mid-March, when daytime temperatures in much of China are favourable for outdoor work, the report pointed out.

The huge contraction in actual demand for steel longs had caused construction steel inventories held by both Chinese mills and traders to mount significantly last month, the report highlighted.

The tonnage of rebar and wire rod held in commercial warehouses in the 35 cities Mysteel follows totalled 6.56 million tonnes (mnt) as of 26 February, jumping by 74.2% or by 2.8 mnt from end-January. Similarly, the combined volume of rebar and wire rod stockpiled inside the 137 surveyed Chinese steel mills had also swollen by 64.6% or 1.24 mnt m-o-m to reach 3.18 mnt, also as of 26 February.

The sluggish demand during the winter slowdown led most steel mills to schedule maintenance or reduce output around the CNY break. Notably, almost all electric-arc-furnace mills had fully halted operations over the period, a factor cited for the lowest weekly output of long products in six months, according to the report.

By end-February, weekly rebar output among the 137 Chinese steelmakers under Mysteel's coverage had dropped by 17.4% or 347,300 t m-o-m to sit at around 1.65 mnt. Meanwhile, the weekly output of wire rod among the 92 surveyed mills Mysteel checks also declined on-month, falling by 6.6% or 50,500 t to 731,600 t.

The recovery in long steel output will be relatively slow this month, mainly due to the mandated production curbs imposed on steelmakers in North China to ensure clean air for the 'Two Sessions' political meetings in Beijing, the report anticipates. In addition, profitability and the pace of demand recovery will also be important factors influencing the production plans of steel mills, the report adds.

As such, construction steel production will witness a mild rebound in March, with Mysteel predicting that weekly rebar production will average around 2 mnt.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.